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Friday 19 December 2008
Global Economy Seen Sinking into ‘Severe’ 2009 Recession
A major banking group warned the global economy will sink into “severe” recession next year as Japan’s battle to stave off a prolonged contraction was on Friday hit by predictions of zero growth into 2010.
Global Economy Seen Sinking into ‘Severe’ 2009 Recession
AFP in Tokyo 19 December 2008
A major banking group warned the global economy will sink into “severe” recession next year as Japan’s battle to stave off a prolonged contraction was on Friday hit by predictions of zero growth into 2010.
The Japanese cabinet approved the country’s first zero growth forecast in real terms in seven years, which came as the central bank continued a two-day meeting to consider slashing interest rates to rock-bottom.
With the world’s second largest economy battered by slumps in domestic demand and exports, the Washington-based Institute of International Finance (IIF) said the global economy would shrink 0.4 per cent in 2009, after 2.0 per cent growth this year.
Charles Dallara, managing director of the IIF – which represents more than 375 of the world’s major banks and financial institutions – called it “the most severe, globally synchronised recession in modern economic history”.
The global crisis requires a global co-ordinated response, he said.
Mr. Dallara said the economy was mired in a negative feedback loop of weakening economic activity and intense financial market strains.
“You”ll see much more bang for the buck” with a co-ordinated response, he said, adding: “It will be important that these measures be complemented in Europe and in Japan.”
In a grim assessment, the IIF said in its monthly Global Economic Monitor report: “It should be emphasised that an overall contraction in the global economy is a truly weak outcome, and the first time this has happened in the post-1960 period.”
Mature economies – including the US, Britain the 15-nation eurozone and Japan – that are now in recession were forecast to contract a hefty 1.4 per cent amid the worst financial crisis since the Great Depression.
The US economy, the world’s largest and the epicentre of the financial tsunami, would shrink 1.3 per cent in 2009 after growth of 1.2 per cent this year, according to the IIF projections.
The eurozone would contract by 1.5 per cent from 0.9 per cent growth, and Japan would shrink 1.2 per cent after zero growth, the IIF said.
France, a part of the eurozone, said on Friday it will sink into recession next year for the first time since 1993 while it also faces a steep rise in unemployment.
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Global Economy Seen Sinking into ‘Severe’ 2009 Recession
AFP in Tokyo
19 December 2008
A major banking group warned the global economy will sink into “severe” recession next year as Japan’s battle to stave off a prolonged contraction was on Friday hit by predictions of zero growth into 2010.
The Japanese cabinet approved the country’s first zero growth forecast in real terms in seven years, which came as the central bank continued a two-day meeting to consider slashing interest rates to rock-bottom.
With the world’s second largest economy battered by slumps in domestic demand and exports, the Washington-based Institute of International Finance (IIF) said the global economy would shrink 0.4 per cent in 2009, after 2.0 per cent growth this year.
Charles Dallara, managing director of the IIF – which represents more than 375 of the world’s major banks and financial institutions – called it “the most severe, globally synchronised recession in modern economic history”.
The global crisis requires a global co-ordinated response, he said.
Mr. Dallara said the economy was mired in a negative feedback loop of weakening economic activity and intense financial market strains.
“You”ll see much more bang for the buck” with a co-ordinated response, he said, adding: “It will be important that these measures be complemented in Europe and in Japan.”
In a grim assessment, the IIF said in its monthly Global Economic Monitor report: “It should be emphasised that an overall contraction in the global economy is a truly weak outcome, and the first time this has happened in the post-1960 period.”
Mature economies – including the US, Britain the 15-nation eurozone and Japan – that are now in recession were forecast to contract a hefty 1.4 per cent amid the worst financial crisis since the Great Depression.
The US economy, the world’s largest and the epicentre of the financial tsunami, would shrink 1.3 per cent in 2009 after growth of 1.2 per cent this year, according to the IIF projections.
The eurozone would contract by 1.5 per cent from 0.9 per cent growth, and Japan would shrink 1.2 per cent after zero growth, the IIF said.
France, a part of the eurozone, said on Friday it will sink into recession next year for the first time since 1993 while it also faces a steep rise in unemployment.
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